Executive summary

Coal and coal seam gas (CSG) development can potentially affect water-dependent assets (either negatively or positively) through a direct impact on groundwater hydrology. This product provides the modelled hydrological changes to groundwater in response to likely coal resource development in the Clarence-Moreton bioregion after December 2012. The methods are summarised and existing models are reviewed, followed by details regarding the model development, parameterisation, and sensitivity analysis. The product concludes with probabilistic predictions of hydrological change, including uncertainty analysis and a discussion of model limitations.

This bioregional assessment (BA) considers two potential futures:

baseline coal resource development (baseline): a future that includes all coal mines and CSG fields that are commercially producing as of December 2012

coal resource development pathway (CRDP): a future that includes all coal mines and CSG fields that are in the baseline as well as those that are expected to begin commercial production after December 2012.

The difference in results between CRDP and baseline is the change that is primarily reported in a BA. This change is due to the additional coal resource development – all coal mines and CSG fields, including expansions of baseline operations, which are expected to begin commercial production after December 2012.

The conceptual model for the Clarence-Moreton bioregion in companion product 2.3 (Conceptual modelling for the Clarence-Moreton bioregion) indicates that no new coal mines are expected in the foreseeable future and CSG development is restricted to the Richmond river basin of north-eastern NSW. There is only one additional coal resource development in the Richmond river basin, the West Casino Gas Project (Metgasco Limited) near Casino, NSW. The Clarence-Moreton bioregion baseline includes only one operational mine, namely, the Jeebropilly Mine that is located in the Bremer river basin. As the only baseline coal mine is very remote from the West Casino Gas Project and geological evidence suggests that it is not hydraulically connected to the Richmond river basin, the conceptual hydrogeological model only focused on the geological, hydrogeological and hydrological characteristics of the Richmond river basin.

A recent decision by Metgasco (16 December 2015) to sell back their petroleum exploration licences (PELs) to the NSW Government, as well as withdraw their petroleum production license application (PPLA), effectively means that future development of any CSG resources in the Clarence-Moreton bioregion is highly uncertain. However, as per companion submethodology M04 for developing a coal resource development pathway, once the CRDP is determined, it is not changed for BA purposes, even in cases such as this where Metgasco have discontinued their operations in the Clarence-Moreton bioregion.

Groundwater modelling in the Clarence-Moreton bioregion was guided by the criteria reported in companion submethodology M07 (as listed in Table 1) for groundwater modelling. A regional numerical MODFLOW groundwater model was developed to assess the potential impacts of CSG development on water-dependent assets within and surrounding the area of the West Casino Gas Project. Hydrostratigraphic units in the Richmond river basin were represented by six layers in the MODFLOW model, including layer 1 (alluvium, Lamington Volcanics and unconfined parts of the sedimentary bedrock), layer 2 (Grafton Formation), layer 3 (Bungawalbin Member), layer 4 (Kangaroo Creek Sandstone Member), layer 5 (Maclean sandstone of the Walloon Coal Measures) and layer 6 (coal seams of the Walloon Coal Measures). The groundwater model provided drawdown estimates to assess the direct impacts on groundwater-dependent assets. The direct impact of CSG extraction was reported as the maximum difference in groundwater levels between the baseline and CRDP, along with the time at which it was realised. In addition, the model provided estimates of the exchange flux between surface water and groundwater, which provided input into the surface water model (Australian Water Resources Assessment (AWRA) landscape model (AWRA-L)) to assess the indirect impacts on surface-water-dependent assets. Baseflow change due to the West Casino Gas Project was reported at 16 virtual gauge locations.

CSG extraction wells within the Walloon Coal Measures were simulated in the numerical groundwater model using the MODFLOW Drain package, with a variable conductance that aimed at matching the previously estimated volumes of the extracted water while achieving the target pressure heads. All coal seams were amalgamated into a single layer for the purpose of simulation due to the lack of information regarding the internal structure of the Walloon Coal Measures, in addition to reducing model execution time.

Three types of observed data were used to constrain the uncertainty analysis; namely, historical groundwater levels, water production forecasts and baseflow estimates. Groundwater level records from 188 groundwater bores were used to constrain the simulated baseline heads and 712 water level measurements from 30 monitoring groundwater bores were used to constrain the transient simulations during the period between 1983 and 2013. Upper and lower limits were imposed based on the independently generated forecasts provided by Metgasco to constrain the simulated water production. The observed baseflow in the Richmond River at the Casino gauging station that was derived from historical hydrograph time series from 1983 to 2013 was also used to constrain the pre-production analyses.

A total of 38 parameters were varied during the sensitivity and uncertainty analyses yielding 10,000 parameter combinations, which resulted in 3,877 successful evaluations that could be achieved within the operational constraints of the project. Recharge, drainage conductance of non-CSG drain cells and riverbed conductance were found to be the three most sensitive parameters influencing head observations in layer 1 (alluvium, Lamington Volcanics and unconfined parts of the sedimentary bedrock). The drawdown impact on existing groundwater bores in layer 3 (Bungawalbin Member) was dominated by the vertical hydraulic conductivity ratio of layer 3, followed by the hydraulic conductivity of layers 3 and 4 (Kangaroo Creek Sandstone). The drain conductance of the CSG wells and the storage coefficient and hydraulic conductivity of layer 6 (coal seams of the Walloon Coal Measures) controlled the amount of water that could potentially be produced due to the depressurisation process.

In the Clarence-Moreton bioregion, predictions of drawdown due to the West Casino Gas Project – referred to as additional drawdown, and year of maximum change are made at 1462 model nodes. The median predicted changes in groundwater levels due to the West Casino Gas Project were less than 0.01 m across all model nodes, with the 95th percentile of additional drawdown not exceeding 1 m. For most of the model nodes, the year of maximum change is at or beyond 2102, although a considerable number of model nodes in layers 1 to 4 have median predicted year of maximum change in the decades following cessation of active depressurisation. The 95th percentile of additional drawdown at mode nodes located in the Walloon Coal Measures (layer 6), the target coal seam layer of the CSG extraction, was also less than 1 m. This was due to the model nodes in layer 6 being located close to the model boundary and outside the West Casino Gas Project extents. The additional drawdown in the Walloon Coal Measures should be larger at locations that are nearby the CSG wells within the West Casino Gas Project extents. However, there are no model nodes in the West Casino Gas Project area for model layer 6 (Walloon Coal Measures), so no model predictions were made there for this assessment.

The absolute surface water – groundwater flux, including both leakage and baseflow, was most sensitive to the riverbed conductance followed by the drainage conductance of the non-CSG drainage boundary at the top of the model and the recharge multipliers of recharge in the alluvium and volcanics. However, the drainage conductance of the CSG drain cells is the second-most influential parameter after the riverbed conductance for the change of the exchange flux due to the West Casino Gas Project at most reporting gauges. The median predicted change in surface water – groundwater flux at the reported locations does not exceed 0.01 GL/year.

Overall, the extracted water volume, which mainly depends on the scale of development and the hydraulic properties of target coal seams, is the major controlling factor for forecast impact. In the current study, the influence of hydraulic properties has been taken into account by assigning them a wide value range in order to avoid underestimation during uncertainty analysis. The minor forecast impact likely reflects the relatively small number of wells assumed for the West Casino Gas Project.

Although the current model has shown that the overall potential impact of the West Casino Gas Project is very minor, it is worth highlighting the implications of the limiting assumptions. The groundwater model described in this product is designed for the specific purpose of delivering a probabilistic assessment of the impact of the West Casino Gas Project on water resources in the Clarence-Moreton bioregion. In its current form, the model is neither suited to address any other water management questions nor provide deterministic predictions of hydrological change for this bioregion. Any evaluation or further use of the model requires a formal re-evaluation of the suitability of the conceptual model and underpinning assumptions.

The impact and risk analysis (product 3-4) will not be conducted in the Clarence-Moreton bioregion due to the limited potential for impacts of the additional coal resource development in the bioregion. However, an outcome synthesis (product 5) will be developed for the Clarence-Moreton bioregion to summarise the key findings of this assessment.